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    Alleged Misleading Delinquency Disclosures Might Change The Case For Investing In SLM (SLM)

    Simply Wall St·12/22/2025 12:18:55
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    • Robbins Geller Rudman & Dowd LLP has filed a class action lawsuit against SLM Corporation, alleging that between July 25 and August 14, 2025, the company and certain executives misled investors about rising early-stage loan delinquencies and the effectiveness of its loss mitigation and loan modification programs.
    • The complaint directly contrasts SLM’s CFO’s late-July assurances about “normal” seasonal delinquency trends with later third-party data showing a sharp deterioration in early-stage delinquencies, raising questions about the reliability of prior credit-quality communications to investors.
    • We’ll now examine how these allegations around early-stage delinquencies could influence SLM’s previously optimistic investment narrative on credit trends and growth.

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    SLM Investment Narrative Recap

    To own SLM, you need to believe in the long term opportunity from federal student loan reforms expanding the private loan market, while trusting its underwriting and credit discipline. The new class action over alleged understatement of early-stage delinquencies directly intersects with the current key risk around credit quality and may also affect how investors view any near term catalysts tied to asset quality.

    The recent Q3 2025 earnings release, which highlighted a return to positive net income of US$135.85 million after a loss a year earlier, now sits in a different light as investors reassess how resilient those results are if early-stage delinquencies were rising faster than management suggested. How SLM updates delinquency disclosures and discusses loan modification performance in future reports could shape confidence in both its growth story and its ability to handle the expected influx of new private loan demand...

    Read the full narrative on SLM (it's free!)

    SLM's narrative projects $2.0 billion revenue and $918.9 million earnings by 2028.

    Uncover how SLM's forecasts yield a $31.91 fair value, a 17% upside to its current price.

    Exploring Other Perspectives

    SLM 1-Year Stock Price Chart
    SLM 1-Year Stock Price Chart

    Simply Wall St Community members currently see SLM’s fair value between about US$31.91 and US$40.39, based on 2 individual models. As you weigh those views against the credit quality concerns raised by the class action, you may want to explore how different investors balance growth from federal loan reforms against the risk that higher delinquencies compress margins.

    Explore 2 other fair value estimates on SLM - why the stock might be worth as much as 48% more than the current price!

    Build Your Own SLM Narrative

    Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

    • A great starting point for your SLM research is our analysis highlighting 2 key rewards and 4 important warning signs that could impact your investment decision.
    • Our free SLM research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate SLM's overall financial health at a glance.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.